Policy: Labor

Democrats prepare minimum wage hike bill

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Beltway Confidential,Mark Tapscott,Morning Examiner,Jobs,Senate,House of Representatives,Labor,Republican Party,Democratic Party,Economy,Minimum Wage

Democrats in Congress are preparing a new proposal to hike the minimum wage to $10.10, with the increases to come in three steps ending in 2015.

Two phrases are likely to dominate the arguments on raising the minimum wage: Democrats will contend that "everybody deserves a living wage," while Republicans will respond that the biggest losers will be young people who will be priced out of the market, especially teens looking for summer jobs.

Sen. Tom Harkin, the Iowa Democrat who chairs the Senate Health, Education, Labor and Pensions Committee, is the lead sponsor of the measure in the upper chamber, while California Rep. George Miller, the ranking Democrat on the House Education and Workforce Committee, fills that role in the lower chamber.

Heard it all before?

As a matter of fact, yes, we have, every time the minimum wage is debated. The last time it was raise was in 2007 to the current level of $7.25.

The pro and con arguments are a study in contrasts. The claim that people "deserve a living wage" is a purely emotional plea that conveniently avoids the basic reality about minimum wage.

That reality is that raising the cost of hiring results in fewer people being hired and those with more experience and training being even more highly advantaged than they would otherwise be.

Consider American Samoa

As it happens, American Samoa provides a minimum wage Petri dish. Congress extended the 2007 hike to cover the island territory, whose main industry is canning.

The Heritage Foundation describes what followed:

"One of American Samoa’s two canneries shut down, and the other laid off workers, cut hours and benefits, and froze hiring. Samoan unemployment septupled from 5 percent to 36 percent.

"American Samoa’s Democratic governor, Togiola Tulafona, begged Congress to stop raising the minimum wage."

The few vs. the many

And, according to GAO, while some workers favored the hike, "more workers expressed concern over job security than favored a wage increase."

In other words, the few with more skills and work experience enjoyed the benefits of the higher wage, but the many with less work experience and fewer skills were made more insecure, unemployed or unemployable.

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